Have you been thinking about purchasing that tropical paradise vacation home you’ve been dreaming of in Florida? Or the charming countryside farmhouse with a picturesque landscape in Pennsylvania? Or how about a rustic ski cabin with a crackling fireplace in the mountains of Colorado? Over the years, investing in multiple properties has become an increasing trend. Many of these properties may be either vacation homes or real estate investments across multiple states. Whichever they may be, it is crucial to consider the complications of addressing these multi-state properties in your estate plan. The question is this; how can you ensure that your assets are protected if they exist in different states? Below, we will explore various ways the Law Office of Inna Fershteyn can help you plan your estate with assets across state lines.
What is an Estate Plan?
An estate plan, although varies by case, typically consists of a variety of documents which help you manage your assets both during your lifetime as well as after your death. Primarily, a last will and testament is the main component of your estate plan. It outlines the instructions to handle assets after your death. In addition to a last will and testament, your estate plan can also include other elements such as any trusts, a living will or a power of attorney. A living will serves as your healthcare directive, and includes any treatment preferences in the event that you become incapacitated. Similarly, a power of attorney is an individual of your choosing who will manage your assets during your lifetime if you become incapable of doing so.
Complications of Multi-State Home Ownership
Although owning numerous homes can offer benefits during your lifetime, it can also pose complications during the estate planning process. Since each state only has jurisdiction over property located in that particular state, it will require your additional properties to go through an ancillary probate process in their respective states. For example, your home in New York is able to go through New York Probate Court, however, New York Probate Court has no authority over your vacation home in Florida. Ancillary probate refers to the additional probate processes that must be executed in each respective state. Since each state has its own probate process and tax laws, in the event of your passing, it is likely that the executor of your will must travel to each state and hire an attorney for each individual property. This process can be long, complicated and incredibly expensive, therefore, it is highly recommended to hire an experienced estate planning attorney to help you evaluate your options and choose the most effective way to proceed.
Strategies For Avoiding Complicated and Expensive Probates When You Have Multiple Properties
In this situation, there are various steps to take to avoid lengthy probates that can be costly for your family. It is possible to create a will for each property, tailored to the legalities of each state. Unfortunately, wills are still required to go through probate. If you have individual wills for each property, it will still require a lawyer for each property and it can also cause confusion and conflict for your executor.